Authors: Robert Nešpůrek, Ivan Rámeš, Tomáš Pavlica, Kateřina Trzaska, Tomáš Havelka
As of 1 June 2023, the Unitary Patent (UP) system will come into force. At the same time, a brand-new institution – the Unified Patent Court (UPC) – will start its work. As a result, the mechanism will bring about the biggest change in the field of patents in decades.
The Czech Republic has not yet ratified the necessary documents. Therefore, the most significant changes will not yet take place in the Czech Republic. Nevertheless, the UP system will also have a significant impact on the foreign patent portfolios of Czech entities. Existing European patents will be subject to the jurisdiction of the UPC except for opt-outs, i.e., where patent pending application or patent is excluded from the exclusive jurisdiction of the UPC.
Since the UPC is still a big unknown for patent owners, it is high time to consider whether to let the UPC decide on disputes or to keep the current system of national decision-making and thus opt out. It will be possible to opt out without any restrictions until 31 May 2023, but even after that date it will still be possible to do so, except for patents where cases have already been brought before the UPC.
When and how will it be possible to opt out? And what other changes will need to be taken into account?
Until now, the term European patent has so far been used to describe a system of protection of an intangible asset by means of individual national patents obtained on the basis of a single European application. Under this system, once granted, the patent had to be validated in each country separately. This involved filing translations, paying maintenance fees, etc.
The current system could lead to paradoxical situations where, for example, the Polish Office would revoke a patent granted on the basis of an identical European application, while the Czech Office would uphold the patent. Although filed jointly, the patents were completely independent of each other in accordance with the principle of territoriality of industrial property rights protection. It was up to the individual national bodies to decide on their validity or on infringement cases. And they would often take different approaches.
If you wanted to enforce your patent rights against your competitors in court, you had to file a lawsuit in each country for each of your patents separately.
Simply put, the UPC system will allow decisions on these disputes to be transferred to the UPC. Although the idea of a single proceeding before the UPC may seem more appealing, many foreign owners of European patents may still prefer the old model because it has been tried and tested throughout the time. The opt-out will allow them to proceed on the basis of the current system.
Until now, the European unitary patent system has only been half used. After filing a single European application (stage 1), it was possible to obtain separate national patents in the participating countries (stage 2).
The unitary patent particularly changes stage 2. Once a European application has been filed, it will be possible to obtain a unitary patent valid in all participating countries. This will eliminate the need for additional national validations or translations for each country where protection is sought. One application – one patent for the whole territory.
The protection of unitary patents will be overseen by a new body – the Unified Patent Court. It will have exclusive jurisdiction to make binding decisions on whether patent rights have been infringed or, for example, whether a unitary patent should be revoked, with effects throughout the territory in which the unitary patent enjoys protection. This is similar to the well-known system for EU trademarks and Community designs, where there is a single decision-making authority with effect throughout the EU.
No, it will not. The European patent application phase will remain unchanged. It will still be possible to file for a European patent application. Once a European patent has been granted, the applicant can choose whether to apply for a unitary patent or to obtain a series of individual national patents.
We recommend that you carefully consider which strategy is best for you, which we will be happy to help you with.
The Czech Republic has not yet ratified the UPC Agreement. For that reason, the UPC will not have jurisdiction to decide on the protection of patent rights in the Czech Republic. Similarly, unitary patents will not confer any rights on their owners in the Czech Republic.
Czech entities may still apply for patent protection abroad. This includes protection by a unitary patent in countries where the UP system will be effective. Therefore, the changes brought about by the Unitary Patent and the Unified Patent Court may also directly affect your patent strategy in relation to foreign countries.
The introduction of the UPC will have an impact on your existing European patents abroad. They will still be subject to the old regime – each country will assess their validity and any infringement of the rights attached to them, if any, through its own courts and authorities. However, your existing European patents in countries that have already ratified the agreements will now come directly under the jurisdiction of the UPC. The Unified Patent Court will rule on patent disputes and will decide on the revocation of individual patents unless you decide to opt out.
Thus, if a Czech owner of European patents retains the jurisdiction at the UPC to decide on patent infringement or revocation disputes for countries that have already ratified the treaties, he or she can gain advantage of having a single proceeding to decide that someone else is infringing their patent or that the patent should remain in force for all of these countries, thus avoiding the need to conduct potentially parallel proceedings in many individual countries. On the other hand, this can also have drawbacks: in such a single proceeding, a decision may be taken to revoke the applicant’s patent for all countries that have already ratified the treaties. The current decision-making system may therefore be preferable when defending against claims by others.
The states that will be subject to the new system from the date of its entry into force will be: Austria, Belgium, Bulgaria, Denmark, Estonia, Finland, France, Germany, Italy, Latvia, Lithuania, Luxembourg, Malta, the Netherlands, Portugal, Slovenia and Sweden.
Therefore, if you are interested in applying for European patents for these countries, you will be able to apply directly for a UP with all the benefits it brings.
For the remaining EU Member States, it will be possible to use a combination of the new and old regimes, i.e. to apply for a UP for protection in the participating countries and, for non-participating countries (such as the Czech Republic or Slovakia), to obtain protection by means of the “old” European patent.
In countries where the unitary patent system will be in force from June, the previously granted European patents will automatically fall under the jurisdiction of the UPC.
A number of patentees are now opting out in an attempt to avoid the new regime and continue to be governed by the old system to which they are accustomed.
An opt-out is a notification by the UPC that European patents are not to fall under the jurisdiction of the Unified Patent Court.
There are a number of reasons for opting out. The main ones are, for example:
You will not lose patent protection throughout the territory in a single decision. In the case of an opt-out, the UPC will not have the power to revoke patent protection in all participating countries in a single decision. Your competitors challenging the patent will still have to seek revocation of individual patents before national authorities.
Opt-out can be revoked. If you decide that you do not want to sue your competitor in each state, you can revoke the opt-out and initiate litigation before the UPC. An opt-out can only be revoked once.
The UPC is a new judicial body. This means that it does not have any decision-making practice or settled case-law yet. Its decisions may be erratic at the beginning. Patent holders may therefore prefer the certainty of the “old” system to the new, unknown regime in many cases.
Litigation before the UPC can be very costly. The basic fee for initiating litigation before the UPC for patent infringement proceedings is € 11,000, plus a percentage of the value of the particular litigation (up to € 325,000 if the value of the litigation exceeds € 50,000,000).
There is no administrative fee charged for the opt-out. Only the cost of the work to secure the opt-out notification.
It should also be noted that the opt-out will also affect the Supplementary Protection Certificates (SPCs).
It is possible to opt out now. It is advisable to accede to it by 31 May 2023. The Unified Patent Court will start operating as of 1 June 2023.
It will also be possible to opt out during the next 7 years. However, if the proceedings on existing European patents are initiated before the UPC in the meantime, it will not be possible to opt out from the jurisdiction of the UPC in pending cases.
UP opens up new possibilities to patent owners and new applicants to protect and enforce their rights. There is, however, no one-size-fits-all solution. The most appropriate approach may differ not only for various sectors but also for individual patents.
You should therefore consider whether an opt-out is suitable for you. We will be happy to help and advise you in this matter.
Of course, we will also arrange the appropriate opt-out and notification to the Unified Patent Court for you if you decide to pursue this course for your European patents.
In the field of patent consultancy, the demand for the necessary expertise, including international dimension, is constantly increasing.
As the largest Czech-Slovak law firm with an international approach, HAVEL & PARTNERS boasts one of the largest teams of IP lawyers and patent attorneys. We have helped a number of our clients expand abroad and secure international protection for their creative activities in the form of patents, trademarks, industrial designs or copyrights.
We file national (Czech and Slovak) and European patents, trademarks and industrial designs applications and we are able to secure registration and subsequent protection in any country in the world. We represent clients before national authorities and courts and we will also represent clients before the Unified Patent Court.
For more information about our patent practice, please visit https://hppatents.com/.
